This information is provided for your immediate or near immediate official use only. It is protected by copyright, and is further subject to the following terms and conditions which are agreed to by you. TERMS AND CONDITIONS Proshare Training does not guarantee any results or investment returns based on the information you receive. Although we have used our best efforts to provide the most accurate trading and investment strategies, we cannot promise your future profitability and do not promise verbally or in writing that you will earn a profit when or if you purchase/sell stocks. Ultimately all decisions are made by you. Proshare Training approved marketing company that promotes Proshare or any other speakers or members of the Proshare Analyst Network are not in any way liable for your activities resulting from information obtained using this Investment seminar presentation materials. There is risk of loss in all trading and investing. Past performance is not necessarily a guide to future performance and all investment can go down as well as up. Without limiting the rights under copyright reserved above, no part of the training material may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording, or otherwise), without the prior written permission of Proshare/InvestIQ, the copyright owners of this material. I have read and understood the above, and by viewing these slides, I agree to the content of this disclaimer. Disclaimer
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This information is provided for your immediate or near immediate official use only. It is protected by copyright, and is further subject to the following terms and conditions which are agreed to by you.
TERMS AND CONDITIONS
Proshare Training does not guarantee any results or investment returns based on the information you receive. Although we have used our best efforts to provide the most accurate trading and investment strategies, we cannot promise your future profitability and do not promise verbally or in writing that you will earn a profit when or if you purchase/sell stocks.
Ultimately all decisions are made by you. Proshare Training approved marketing company that promotes Proshare or any other speakers or members of the Proshare Analyst Network are not in any way liable for your activities resulting from information obtained using this Investment seminar presentation materials.
There is risk of loss in all trading and investing. Past performance is not necessarily a guide to future performance and all investment can go down as well as up.
Without limiting the rights under copyright reserved above, no part of the training material may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording, or otherwise), without the prior written permission of Proshare/InvestIQ, the copyright owners of this material.
I have read and understood the above, and by viewing these slides, I agree to the content of this disclaimer.
Disclaimer
Money Talks in Nigeria:
Why, How & When to Invest in Stocks
THE HAVEN (SAM NETWORKING FORUM)THE HAVEN (SAM NETWORKING FORUM)
SKILLS ACQUISITION & MOTIVATION NETWORKING FORUM
In this PresentationMaking Sense of the Maze ..in 30 minutes
..fundamental truths about the Nigerian capital market space
Opportunities … What If?
How to get started ..intelligently.
The market this week……
When & How to Invest ..intelligently
Why Invest in Stocks – Facts!
The NSE has the highest returns in any of the emerging markets for the past 5 years” -The United Nations Development Programme's first African Stock Markets handbook
The second most active sector is the Telecoms and no player has yet approached the market….
The Nigeria market has about 500,000 registered companies with the CAC, and only about 262 are quoted (none of them has up to 25-30% available for trading).
Less than 5% of Nigerians are individual shareholders!
Nigeria’s main source of revenue is from crude oil yet none of the upstream companies are quoted on the exchange!
Many of the listed companies are still in the growth stage…
E Fit be You!..Making that Investment Call!
QUIZ
With a N20m cash gift today; what
would you invest it in on MondayMonday after
this Meeting?
Which one should I invest in?How & When?…..
The ‘How & When’..when the market goes up
everyone is happy and when it is down, people are worried
…Investors in this market must realisethat the market moves up and down and
it is this movement that leads to continuity in purchase….and that is what that is what
separates winners from losersseparates winners from losers
The ‘How & When’.. It is an uninformed decision by
investors to think that they can only make money from the market when
it is high.
If a particular stock is moving up and down, investors should check the
fundamentals to explain the technical analysis
Company’s PerformanceDemand & Supply of sharesMarket information (hearsay, grapevine, (hearsay, grapevine, anywhere)anywhere)
Government PolicyLiquidity of StockInvestors perception of the company’s management, products, position in the industry (remote factors)(remote factors)
What Influences Share Prices?What Influences Share Prices?
Indices to MonitorIndices to Monitor
Earnings Per Share (EPS)
Price Earning Ratio (P/E)
Dividend per Share (DPS)
Business Done column on the NSE Daily Official List
Predictability value of its profit forecast -how well has it met objectives it had set for itself in the past.
Julius Julius AgbonbaseAgbonbase, AGM Investments UNIC Insurance , AGM Investments UNIC Insurance will cover the key points to note here laterwill cover the key points to note here later……..
The Market Review This Week..Snapshot of the Stock Market – WE 180408
The Market reviewed
Gainers, Losers & Implications
Portfolio – Sector review
Outlook & Picks
Review of last week’s activity on the NSETesting the decision making logic
Stocks Attaining 52 weeks high…
Overall, forty-four (44) stocks recorded gainsgains in their share prices; one hundred and one (101) stocks recorded losseslosseswhile seventy (70) stocks closed the week unchanged.
Making sense of it all
The All-Share Index (ASI) closed the week at 61,418.9661,418.96points, down from 63,736.1463,736.14 points recorded in the previous week.
The ASI recorded a depreciation of 3.64%, compared with the depreciation of 1.46% recorded in the preceding week.
The further slowdown in activities in the market during the week was on account of the losses recorded in the InsuranceInsurance, BankingBanking and ManufacturingManufacturing sub-sector.
The market capitalization also depreciated to close the week at N11,842.903billion (approximately US$102, 358.710billion). It depreciated by 3.64%, compared with the depreciation of 1.46% recorded in the preceding week.
…On March 14 the stock was N23.54k, or 82% from its most recent breakout, and N40.81k, or 361% from its 52 week low. The stock appeared to be over
bought based on fibonnacicalculation targets. However,
the candlesticks chart indicated further price appreciation…
Investors have shown interest in the sector to take the stock to
N37.86…or 34% below its high
1: Petroleum Sector:Investors Interest Returns
The Sector Index appreciated by 3.90% due toThe Sector Index appreciated by 3.90% due to
Gains recorded in the share prices of
• Oando (Up 20.50% to N241.00.00) and
• Mobil (Up 18.84% to N283.00)
and losses recorded in the share prices of
• Chevron (Down 7.94% to N290.00),
• Total (Down 3.74% to N242.55) and
• AP (Down 2.33% toN293.98).
Source: FSDHSource: FSDH
2: Insurance Sector:Investors Interest Wanes
The Sector Index depreciated by 4.72% due toThe Sector Index depreciated by 4.72% due to
Losses recorded in the share prices of
•LASACO (Down 14.49% to N4.19),
•AIICO (Down 14.21% to N4.89),
•Niger (Down 11.58% to N7.18),
•Linkage (Down 9.75% to N3.61),
•UNIC (Down 8.62% to N4.56),
•Mutual Benefits (Down 5.21% to N4.56)
•Cornerstone (Down 4.36% to N5.70)
Source: FSDHSource: FSDH
3: Banking Sector:Profit taking takes its toll
The Sector Index depreciated by 4.60% due to The Sector Index depreciated by 4.60% due to LossesLosses recorded in the share prices of recorded in the share prices of
•UBA (Down 9.19% toN51.75),
•Afribank (Down 8.06% to N22.81),
•Fidelity (Down 7.64% to N10.15),
•GT Bank (Down 6.52% to N33.97),
•First Bank (Down 5.32% to N42.50),
•IBTC-Chartered (Down 5.05% to N19.95),
• Diamond (Down 4.88% to N19.50),
•Union Bank (Down 4.88% to N39.01),
• Zenith (Down 3.81% to N48.00),
•Oceanic (Down 3.55% to N28.55),
•Bank PHB (Down 2.72% to N28.21),
•FCMB (Down 1.12% to N18.50) and
•Access (Down 0.09% to N21.98) Source: FSDHSource: FSDH
4: Manufacturing Sector:Investors Still looking for a spark?
The Sector Index depreciated by 3.44% due toThe Sector Index depreciated by 3.44% due to
Losses recorded in the share prices of •CAP (Down 20.07% to N54.35),
•GlaxoSmithKline (Down 15.71% to N20.61),
•Julius Berger (Down 14.50% to N102.60),
•UPDC (Down 13.61% to N24.19),
•Nestle (Down 7.51% to N249.72),
•Unilever (Down 7.32% to N23.03),
•Presco (Down 4.79% to N15.50) and
•NAHCO (Down 4.67% to N27.55)
Source: FSDHSource: FSDH
Drop in market capitalization and indexMarket is highly dependent on Large Caps
Our market is largely affected by highly capitalized companies like Nestle, Nigeria Breweries, Guinness, First Bank such that when there are some corporate actions like dividends, bonuses payments , the market is affected.
Slow down in activities in the 10 most capitalized companies in the market can drag the market to a particular direction.
So if there is any movement in statistics, we have to find out why. If these banks for instance do 1 for 3 or 1 for 4, you will see how it will affect the market.
Source: Chidi Agbapu, MD, Emerging Capital and Securities Limited
Top 20 Capitalised
Stocks@ 180408
Harmonised Year End – A solutionMarket is highly dependent on Large Caps
There is a directive by the Central Bank of Nigeria (CBN) that all banks should harmonise their year end and if they choose 31 December, it means, all must close their year at the same time and there will be a pattern.
If there are dividend and bonuses, it will be at the same period and it will create a pattern that will be a trend and the banks are the most capitalisedcompanies and you see that the market might go down at the first quarter of the year if there is harmonised market operations
This will enhance the ability of players to chart a seasonal trend.
Source: Chidi Agbapu, MD, Emerging Capital and Securities Limited
So what is the Outlook for next week?Positive Still
…. anticipate a recovery in the market after the lull seen during the week as we expect the release of companies’ results such as:
UBA (Q2, 08);
Zenith Bank(Q3, 08);
Dangote Sugar(Q1, 08);
UACN(FY, 07) and
GT Bank(FY, 08)
which are due in April to impact positively on the market.
Note: April Allocation out & Budget Approved
Source: FSDHSource: FSDH
Possible…..Not Exhaustive though
Source: FSDHSource: FSDH
Opportunity is Relative!So Should what else must I know?
•Why some sectors are doing so well
•When stock price is coming down and volume is going up
•Preference between IPO and secondary market
•Prompt release of certificates
•Ratings - Why Bother?
Why some sectors are doing wellEvery market has its time.
Hitherto, one could not imagine a situation where you could walk into a bank and get funding for a viable project or take consumer loans…or a bank approaches the market to mobilise the volume of funds it has done currently. Times have changed.
Ditto investors are moving into sectors that are promising and companies that have potential for growth are getting their attention.
Source: Chidi Agbapu, MD, Emerging Capital and Securities Limited
Stock Price v. Volume MovementA matter of confidence
When stock price is coming down and volume is going up, it means that people are buying and when the prices of a stock is coming down and the volume is coming down, it means people are dumping out of fear because everybody wants to sell. But if you are selling and people are buying, it means accumulation, it shows confidence.
Source: Chidi Agbapu, MD, Emerging Capital and Securities Limited
Preference between IPO and secondary market
A matter of risk based assessment of returnA lot of people still prefer IPO to secondary market.
Although it takes longer time for the primary market transaction to be concluded, it is always worthwhile at the end of the day in terms of capital appreciation.
For instance, people who bought into a private placement may within a short time have huge returns on investment.
Investing into public offers is the result we pay for our interest in public offers. Most private placements and public offers are over-subscribed which is an indication that despite the problems the primary aspect of the market is still very active.
Source: Chidi Agbapu, MD, Emerging Capital and Securities Limited
Over subscription of public offersA function of Interest…
There is over subscription because of enormous interest. A company that has provision for 200 persons cannot possibly accommodate 500. It has to be rationed.
The way the allotments are done is based on an across the board system is used.
For instance, if people who applied for 100,000 units are given 50, 000 all other persons who applied for 100,00 units will be given 50,000 units. It is not possible for the issuer to give 80, 000 units if you applied for 100,000 units because you are related to me and then give another person 50,000 units. Preferential allotment is not possible theoretically. Preferential allotment is not possible theoretically.
However, some strategic investors who could bring in special skill and other strategic inputs that you will require for the business you want to do come with conditions for preferential allotment and that is why it is announced from the first day that strategic investors will be given preferential allotment and the rest of the investors should be happy.
Investing in the capital market requires patience; when some investors run into a brick wall they go with the excuse that they applied for 50,000 units and they got less .These things happen .
Source: Chidi Agbapu, MD, Emerging Capital and Securities Limited
Speedy Release of CertificatesThe FCMB example
SEC has various levels of competence.
FCMB’s case is quite exceptional because they have in-house registrars and other registrars have different level of competence which determines the volumes they can handle. This can be measured in terms of staff capacity, IT Standard.
Operationally most of these Registrars have some issues. Among companies that have registrars, when a staff is perceived to be under performing, he is sent there and that shows the mentality of people working there.
The numerous work being done there will be more effective if adequately managed and that is why all the market operators are asking for e-bonus, e-public offer and e-dividends which will be the best thing that can happen to the sector. By December 31 deadline the certificates would have been By December 31 deadline the certificates would have been dematerialized.dematerialized.
Source: Chidi Agbapu, MD, Emerging Capital and Securities Limited
International & local RatingsWhy you should care!
Nigeria has been named as the first five markets globally in terms of returns.
It is a mature market with operational efficiency. Our market is advanced as we run T+3 while other developed market are using T+5.
Level of transparency has increased in the market and this is what has accounted for the high level of interest in the market by Nigerians in the diaspora.
This is how the marklet runs…Source: Chidi Agbapu, MD, Emerging Capital and Securities Limited
Round UpTaking it Personal
…Making the adjustment
towards intelligent investing…….
How to Get Started Investing in the Stock Market
Get educated: Read about stocks and the market, take a seminar or class on investing and review online financial sites.
Develop financial goals and an investing and stock-picking strategy.
Research individual stocks by reading annual reports, quarterly reports and other documents on file with the NSE (or check out www.proshareng.com)
Invest in what you know. Consider the stocks of companies with which you are familiar and in which you have confidence.
How to Get Started Investing in the Stock Market
Check out the holdings of some successful mutual fund companies. If they are winning with particular stocks, perhaps you will too.
Diversify. Avoid putting your money in just one or two stocks or, for that matter, in one or two industries.
Use a customer service friendly stockbroker to buy stocks if you are confident in your investment skills and have the time to do your own investing. Either way, you'll still pay commissions.
Buy stocks that you will feel comfortable holding for three to five years. Resist the temptation to dump a stock the moment its price drops a few percentage points. Give it a chance.
Tips & Warnings
Know your appetite for risk before you start investing. The stock market can be a roller-coaster ride.
If you don't have time to research and review stocks daily, try investing in a mutual fund account, at least to get started.
Look for value. Use price-earnings ratios, usually reported in newspapers' stock tables, to compare a stock to industry norms before you buy.
Don't think that by investing all your money today, you will be a millionaire next month. Invest for the long term.
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